Centre for Economics and Business Research annual report published on Saturday forecasts China tol overtake the United States to become the world’s biggest economy in 2028, five years earlier than previously estimated due to the contrasting recoveries of the two countries from the COVID-19 pandemic. Japan would remain the world’s third-biggest economy, in dollar terms, until the early 2030s when it would be overtaken by India, pushing Germany down from fourth to fifth. The United Kingdom, currently the fifth-biggest economy by the CEBR’s measure, would slip to sixth place from 2024. It also said the pandemic’s impact on the global economy was likely to show up in higher inflation, not slower growth. “But the underlying trends that have been accelerated by this point to a greener and more tech-based world as we move into the 2030s.”
A shortened trading week with all markets closed on Friday and some closed Thursday (Japan, S Korea, Germany,) and some others having a half day Thursday. UK is also closed on Monday along with the Euronext.
US markets on Thursday closed DOW +0.23%, NDX +0.26%, S&P +0.35%, Russel 2K -0.16% in quiet trading. Alibaba -13% on news its being probed by the Chinese regulator and PBoC. Republicans blocked the Democrats’ attempt to pass $2,000 direct payments putting the fate of the relief package in doubt in the short term but Biden could sign it in 27 days time.CDC said just over 1million vaccine shorts had been administered as of Wednesday less than the 19m originally forecast.Press reports a doctor in Boston with a shellfish allergy developed a severe allergic reaction after receiving Moderna’s coronavirus vaccine on Thursday. But has recovered.UPS, Fedex and DHL etc expecting continued heavy demand as post Christmas returns are expected to surge.
A report from Narvar (software and tech company that manages online returns for hundreds of brands) estimates that returns this year will be double last years.
Banks JPMorgan Chase -0.44%, Citigroup -0.35% and Wells Fargo -1.7%, AMEX +0.34%
Work from home names: Facebook -0.3%, Apple +0.8%, Amazon -0.4%, Netflix -0.1%, Disney +0.1%, Zoom Video -2.3%, Alphabet +0.3% and Microsoft +0.8%,
Tech NXP +0.3%, Nvidia -0.1%, Micron +0.9%, AMD +0.3%, Skyworks +0.3%
Re-opening stocks Boeing -1.2%, Caterpillar +0.6%, Simon Property +0.9%, Kohl’s -2%, Nordstrom -1.8%, Gap -1.3%, United Airlines -1.9%, Carnival -0.5%, Wynn Resorts -0.8%, Chevron -0.4%, Exxon Mobil -0.4%,
Lock down names Campbell Soup +0.9% General Mills +0.2%, JM Smucker +0.8%
USD was flat vs Yen & weaker vs Euro. Bitcoin +2.6% @ 23,585.00 (It will be interesting to see if Bitcoin sees its usual sell off after Christmas), VIX -7.6% @ 21.53, US T10 @ 0.926%
OIL Brent +0.2%, WTI +0.37% on US inventory draw number from after market Wednesday and Brexit hopes.
Gold +0.2%, Silver +0.1%, Copper +0.4%
Dallas Fed Manufacturing
DAX was closed, CAC -0.1%, FTSE +0.1% opened slightly higher both traded sideways; FTSE in the green most of the day but the CAC dropped into the red from mid morning and stayed there. Trading was choppy in the shortened session. Sentiment +VE on the expectation of announcement that a Brexit deal has been agreed. The deal was announced after market. Sterling rallied and UK Banks +VE ahead of the announcement.
Saturday the EU and UK made public the 1,240 page agreement that is likely to govern future trade and cooperation between them from January 1. EU envoys are expected to meet on Monday to discuss the document, drawn up over nine intense months of talks. Link to agreement https://ec.europa.eu/info/sites/info/files/draft_eu-uk_trade_and_cooperation_agreement.pdf
Eurozone No data due
GERMANY No data due
FRANCE Unemployment Benefit Claims and Jobseekers
UK Market closed Monday; re-opens Tuesday 29 Dec
JAPAN Nikkei to open higher. Sentiment helped by the drop in unemployment which may signal the covid impact on the jobs market is starting to ease. Although the record number of new cases and news the new highly infectious strain has been discovered in Japan a slight -VE.
Data due Industrial Production (F/cast +2.2% MoM or -0.7% YoY) BoJ summary of Options.
Govt urges a quiet and distanced new year.Govt announced 949 new covid cases on Saturday a new record high and bans all foreigners from 28 Dec until end of January following the detection of the new highly infectious variant in Japan in a passenger arriving from the UK.
Govt outlined its Green growth strategy with a a goal to replace new gasoline-powered vehicles with electric cars by the mid-2030s to reach net zero carbon emissions and generate nearly $2 trillion a year in green growth by 2050.On energy to expects greater electricity demand and aims to expand renewable sources to 50%-60% by 2050 from 18% last year. Key areas are power from hydogen and Ammonia plants, with Nuclear and thermal plus the addition of 10 gigawatts of offshore wind by 2030.
Defence minister urged U.S. President-elect Joe Biden to “be strong” in supporting Taiwan in the face of an aggressive China, calling the island’s safety a “red line.” “We are concerned China will expand its aggressive stance into areas other than Hong Kong. I think one of the next targets, or what everyone is worried about, is Taiwan,”
Govt reveals action plan to boost farm exports to Yen 2 tn by 2025 aiming to make wagyu and sake more competitive along with 27 other key product lines.
Toyota Motor Corp said Friday its global production in November climbed 7% YoY to 828,066 units, marking a record for the month and showing resilience against disruptions caused by the coronavirus pandemic. While many other Japanese carmakers logged declines in the reporting month. +VE
Toyota also unveiled an operations management system that enables multiple autonomous vehicles to run on the same road network simultaneously. It's e-Palette autonomous electric vehicle will be used in the athletes’ village for the Tokyo Olympics and Paralympics next summer. +VE
Fukui Bank is in the final stage of negotiations to make Fukuho Bank a subsidiary +VE for consolidation.AEON started selling lucky bags on Friday, 7 days ahead of the New Year when they normally go on sale.
The Ministry of Economy, Trade and Industry (METI) said the new rules aimed for greater transparency in its dealings with bidding entities and their audit and subcontracting networks, as well as on cost breakdowns and other aspects of procurement. It follows an outcry over a deal to disburse coronavirus relief to struggling businesses that involved powerful advertising agency Dentsu Inc. Dentsu said it would halt any bids for trade ministry projects.
Japan Airlines has found temporarily reassignment for some employees to work as miko, Shinto shrine maidens at Munakata Taisha shrine, located in the town of Munakata, Fukuoka Prefecture.
Skymark Airlines has decided to introduce a four-day workweek for office employees, possibly from next spring, as part of efforts to keep their jobs amid low travel demand due to the coronavirus pandemic, a source with knowledge of the plan said Saturday.
Birth Rate expected to fall below 800k in 2021 as couples defer due to the covid impact. Follows last weeks report of a rise in teenage pregnancies due to the covid situation.
SOUTH KOREA Expect markets to open flat having hit 2,800 on last week. Upside could be muted this week ahead of market going Ex dividend Tuesday, which is likely to put pressure on Tech and Healthcare. Investors will also be watching US stimulus bill developments.
No data due
Govt announced 970 new cases on Sunday from 1,132 cases on Saturday but noted mainly due to less testing. Govt to meet Sunday to discuss whether to increase social distancing measures.
The Bank of Korea (BOK) said Friday it will maintain an accommodative monetary policy next year to help the nation's economic recovery from the pandemic, but it will closely watch the side-effects of monetary easing.
Major corporate groups are opting out of hosting New Year’s kickoff meetings in person this year, instead companies such as Samsung and Hyundai Motor are to go online instead.
Samsung Galaxy S21 Ultra is expected to support the fastest Wi-Fi speeds among all mobile gadgets in the Korean market, according to reports Sunday. The upcoming Galaxy S21 series next month is likely to become the first mobile device to support Wi-Fi 6E, an extended standard technology using the 6-gigahertz band. +VES
amsung Group’s firms listed on the Korea Exchange exceeded 700 trillion won ($636 billion) for the first time, data showed Sunday.
LG Electronics is forecast to reap a record profit from its home appliance business this year, due to high sales of premium items at home and abroad, according to industry sources on Sunday. +VE
Mexico has agreed to increase its import quota of South Korean cold-rolled steel products, South Korea's foreign ministry said Friday. +VE
TAIWAN Expect market to open higher as manufacturers sentiment turns more +VE but 14,400 is a strong resistance level for the market to break through.
No Data due
Govt reported four imported cases of COVID-19, bringing the nation’s total to 780. The new cases involve people arriving from Indonesia, Pakistan, the Philippines and the US, who all presented a negative COVID-19 test result issued within 72 hours of boarding their flight, the center said in a statement.
TIER reports manufacturers and service providers more optimistic But Property developers cautious. Most shipping companies, logistics firms and stock brokerages are upbeat, but restaurants and telecoms have dim views, its latest report showed. +VE
TSEC Corp, the nation’s biggest manufacturer of solar cells, was yesterday granted approval by the Ministry of Economic Affairs to invest NT$700 million (US$24.53 million) to build a new production line in Hsinchu’s Hukou Township. Came as demand for renewable energy has increased significantly after overseas Taiwanese manufacturers allocated more production back home due to the US-China trade dispute. +VE
Financial Supervisory Commission (FSC) is still reviewing China Development Financial Holding Corp’s application to acquire China Life Insurance Co due to concerns over the company’s capital adequacy, it said on Thursday.
MediaTek overtook Qualcomm Inc as the world’s biggest smartphone chipset supplier for the first time last quarter, as its affordable chips gained traction in emerging markets, market researcher Counterpoint said yesterday. The chipmaker expanded its market share to 31% last quarter, from 26% a year earlier.
CHINA Expect market to open lower with concerns over US/China relations. Industrial profits data slight +VE. News of new covid cases in Beijing -VE for sentiment. The probe into Alibaba means Ecommerce likely to remain weak.
No data due but out Sunday
Industrial Profits YTD Nov +2.4% YoY vs +4% Oct (F/cast was +2.2%)
China’s industrial firms reported a seventh straight month of profit gains in November, supported by strong production and sales, as the recovery from the covid downturn continued. Profits in November alone +15.5% to 729.3 billion yuan (US$111.9 billion), easing from October’s three-year high of 28.2%Private-sector profits +1.8%, but SOE industrial firms -4.9%. Among the 41 industries surveyed, 25 saw profit rises. Among the 41 industries surveyed, 25 saw profit rises. The special equipment manufacturing posted the largest increase in profit (23%), followed by communications (15.7%), general manufacturing (12.5%), chemical products (10.5%), metal smelting and rolling processing (10.1%), automobile (7.2%), electrical machinery (6.6%), and non-metallic mineral products (1.4%). In contrast, petroleum and natural gas extraction -70.8%, and the coal mining and washing industry -24.5%.
Beijing district in 'wartime state' due to more virus infections Several local patients have recently emerged in the districts of Chaoyang, Xicheng and Shunyi in Beijing. Pang Xinghuo, deputy director of the municipal center for disease control and prevention, said on Saturday that Beijing has been carrying out mass testing in key areas, and five people, all close contacts of the two reported on Friday, have tested positive.
Dalian To help curb the outbreak the National Health Commission has sent a working group to the Liaoning province port, the commission said Friday, China Daily reports.
US-China rivalry: Biden unlikely to be any softer on Beijing than Trump, President-elect’s diplomatic strategy ‘will be largely different from Trump, but that does not mean China-US relations will improve’, Tsinghua University’s Yan Xuetong says Biden might also seek to use damage caused by Trump as a bargaining chip to get what he wants from Beijing. -VE for sentiment.
China lowers age of criminal responsibility to 12 from 14, comes as part of wider amendment to criminal law, which includes tougher penalties for stock market fraud (now up to 15 years) and intellectual property rights violations. Comes into effect 1 March 2021.
Chinese illegal entrant arrested in Thailand for making medical gloves. Reason for mentioned it is that he was importing substandard gloves from China. Highlights the fact that many are seeking to make profits from the covid situation but long term damage could be done to China if the supplies it exports are around to be substandard. -VE
HONG KONG ADR’s -128pts @ 26,258 with cautious trading. Ecommerce names still weak as investors wait to see the extent of the Beijing probe into Alibaba.
Data due after market Balance of Trade, Exports, Imports
Govt reported 59 new covid case as of midday Saturday; 26 with unknown sources.FT report that Carrie Lam is facing public scepticism over the use of mainland vaccines; which have become a political issue now.
SHORT SELLING Thursday 13.3% vs 12% Wednesday
Top Shorts Hengan (1044) 48%, CLP (2) 36%, BoC (3988) 33%, Sinopec (386) 32%, Anta (2020) 32%, Country Garden (2007) 28%, Hang Seng Bank (11) 27%, Bank Comm (3328) 26%, Bud Apac (1876) 25%, Henderson Land (12) 25%.
Li Ka Shing Foundation Limited acquired a total of 776,500 shares in CK ASSET (01113.HK) at the average price of HK$40.6770, HK$39.9804, HK$38.8302 and HK$38.9406 per share on 18 December, 21 December, 22 December and 23 December 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.86% to 35.89%, and from 35.93% to 35.95%, respectively.
Sinovac Biotech (SVA.US) will delay the late-stage test result of its COVID-19 vaccine in January 2021, reported WSJ. David Hui, Professor of Respiratory Medicine at CUHK, said the delay meant Sinovac's vaccine may not be available in Hong Kong as scheduled for January 2021. The vaccine may arrive as early as February 2021. It also adds to concerns about the openness and effectiveness of the vaccines.
China's CDE announced that Sinopharm's sales application of coronavirus vaccines (Vero cells) has been approved. Subsequently, SINOPHARM(CNCM LTD) (600511.SH) rallied on the news.
CATHAY PAC (293 HK) weak as single day arrivals at Airport hit a record low. -VE
KERRY LOG NET (00636.HK) said that the Proposed Spin-off of KERRY EXPRESS THAILAND (KETH) is complete and the KETH shares have been listed on the SET since 24 December 2020. It is expected that the Special Dividend of 13.8 cents per share will be paid in cash on or around 31 December to shareholders whose names appear on the registers of members at the close of business on 22 December.
CCL last printed at 175.88, -0.38% WoW. In two-week terms, the three major Centaline property indexes dropped altogether. CCL grossed -1.05%; CCL Mass -1.34% CCL (small-to-medium flats) -1.31%. For the next few weeks, the housing prices were projected to stay volatile said Centaline Property. In absence of downtrend or uptrend signals, the price trend is still contingent on observation.